Propane Cost

• During the heating season (October to March), the federal Energy Information Administration publishes weekly average propane prices in the United States. In the 2011-2012 heating season, average weekly prices ranged from $2.74 -$2.88, or about $1,100 -$1,150 to fill a 500-gallon tank. From 2005-2010 average prices were $1.73 -$2.66 a gallon, or $690 -$1,070 to fill a 500-gallon tank. With three to five fill-ups per six-month season, total winter costs could be $2,000 -$5,500.
• Propane is a byproduct of oil and gas production, and in the past propane prices rose and fell in tandem with the cost of crude oil. However, more than half the propane produced in the United States now comes from liquids brought to the surface by drilling for natural gas in shale rock, so propane prices are currently following the more stable costs of natural gas.

• Residential storage tanks are typically 120, 250, 500 or 1,000 gallons, either above-ground or underground. For safety, propane tanks should only be filled to about 80% of total capacity.
• Propane is sold by private companies. Some homeowners own their propane tank, while others rent or lease it from the propane company. Homeowners who own their tank can shop around for the best price for each delivery, but will have to pay any increases in the market price; they're also responsible for maintaining the tank.
• With a pre-buy or fixed-price arrangement, consumers sign a contract in late summer or early fall for as much propane as they estimate they'll need for the entire winter. A contract can be a good deal if prices rise after the contract is signed; this happens most years because demand is higher in the winter, but prices can be unpredictable.

• Some companies charge separate fees of $5 -$100 or more per item for delivery, hazmat safety, administrative costs, setting up payment plans, invoicing, fuel surcharges or other services. For example, in September 2012 Amerigas charged a $9.59 HazMat & Safety compliance fee and $99 for setting up a fixed-price, 12-month payment plan.
• With a company-owned propane tank, often the company requires that a certain amount of propane be used each heating season, and may charge a fee (typically $50 -$100) if usage drops below the minimum.

• Many propane suppliers offer new-customer incentives varying from a specific amount of free propane (typically 50-100 gallons) to a discounted price (roughly 5 50 cents per gallon, although it varies significantly). Be aware of the difference between introductory pricing and the standard rate after the "new customer" period ends.
• Some companies offer discounts of 5 cents to 15 cents per gallon if the account is paid promptly (such as within seven days of delivery) or for automatic-fill customers. Companies also offer a bonus (50-100 gallons free or a $50 -$75 credit) for referring someone who becomes a leased tank customer.
• Work with neighbors to negotiate a group rate for deliveries, or look for an established local fuel cooperative like The Sacandaga Group in New York or Our Town Energy Alliance in New Hampshire. For a moderate annual membership fee (typically $20 -$30), these buying groups negotiate a discounted rate; this varies considerably but can be less than the market rate by roughly 10 cents to $1 or more a gallon.
• The US Department of Health & Human Services provides information about the Low Income Home Energy Assistance Program (LIHEAP), helping helps low-income households meet urgent home energy needs. LIHEAP is funded by the federal government but handled by each state, so eligibility rules and assistance varies.

• Most companies require that new customers file a credit application before propane is delivered, unless the delivery is paid for with cash, according to the Oklahoma LP Gas Research, Marketing and Safety Commission.
• Large, national propane chains include AmeriGas, Ferrell Gas and Suburban Propane.
• The National Propane Gas Association provides referrals to propane retailers by zip code.

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